Realty seeks incentives on home loans, rental income

New Delhi: With the Union Budget for FY23 round the corner, real estate developers have started making their suggestions and recommendations to the Centre for including them in the Budget document. The Budget will be tabled in the Parliament on February 1. After facing strong headwinds during the initial days of the pandemic, the real estate sector has largely managed to come out of the turbulent clouds in 2021. To keep the momentum intact in the high-growth potential realty sector, several developers have requested the government to provide incentives on taxes (both principal and interest) for home loans, on the rental housing segment, and extend some concessions on income from renting of housing properties.

Also, some urged the government to remove taxation on notional rental income in order to further boost demand for new properties, besides reducing GST on raw materials. "Housing demand did bounce back strongly after the first as well as the second wave of the Covid pandemic, driven mainly by historical low interest rates on home loans. However, the sector is still plagued with two perennial problems - unsold inventories and stalled projects. The third wave has emerged as a challenge for the sector and the economy," said Dhruv Agarwala, Group CEO at Housing.com, Makaan.com and Proptiger.com.

"The corpus of the government-backed stress fund 'SWAMIH' should be hiked to at least Rs 1 lakh crore. The current corpus of Rs 25,000 crore has already been committed." In November 2019, the Centre launched the 'SWAMIH Investment Fund' to help complete over 1,500 stalled housing projects, including those that have been declared non-performing assets (NPAs) or had been admitted for insolvency proceedings.